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Bonds

A corporation issues $100,000, 8%, 5-year bonds on January 1, 2007, for $104,200. Interest is paid semiannually on January 1 and July 1. If the corporation uses the straight-line method of amortization of bond discount, the amount of bond interest expense to be recognized on July 1, 2007, is _______.

$8,420
$4,420
$4,000
$3,580

The Mansur Company issued $100,000 of 12% bonds on May 1, 2007 at face value. The bonds pay interest semiannually on January 1 and July 1. The bonds are dated January 1, 2007, and mature on January 1, 2011. The total interest expense related to these bonds for the year ended December 31, 2007 is

$2,000
$4,000
$8,000
$12,000

Solution Preview

A corporation issues $100,000, 8%, 5-year bonds on January 1, 2007, for $104,200. Interest is paid semiannually on January 1 and July 1. If the corporation uses the straight-line method of amortization of bond discount, the amount of bond interest expense to be recognized on July 1, 2007, is ...

Solution Summary

This solution is comprised of a detailed explanation to answer the amount of bond interest expense to be recognized on July 1, 2007 and total interest expense for Mansur Company.

$2.19